Tank Storage VS. Tankless Water Heaters

With every new project I ask: What type of water heater would you like, tank storage or tankless? And over the last three years homeowners’ answers have been varied, but most people just seem confused. Here are the pros and cons to clear things up.

Tank Storage Water Heater

Water is heated in big quantities via a heating element in an insulated tank and stored at a constant temperature. In a single family residence, the tanks store 20 to 80 gallons. They are powered by gas, propane, fuel oil, or electricity.

Tankless Water Heater

Water is heated instantaneously when needed. Most tankless water heaters provide hot water at a rate of 2 to 5 gallons per minute. They are powered by gas or electricity. Also, “tankless” is a misnomer since newer models have a tiny tank to avoid the initial heating lag.

Pros

As long as you don’t exceed the heater’s flow rate, the hot water never ends!

Lower operating and energy costs than a tanked heater.

Life expectancy of 20 years. Plus easily replaceable parts mean it could last much longer.

They’re MUCH smaller and can be installed outside.

They’re very quiet.

They emit significantly less CO2 than a tanked heater.

If you use about 40 gallons daily, tankless is around 30% more efficient. If you use about 80 gallons, it’s around 10% more efficient.

If you have a large household and need simultaneous multiple uses, you can install multiple water heaters without too much inefficiency.

Cons

Output is limited by the heater’s flow rate. So if you have one unit and you run the dishwasher and take a shower at the same time, you’ll be taking a very chilly shower. Answer: install more than one unit.

They have a higher initial cost and higher maintenance cost than a tanked heater.

With larger households (85+ gallons a day), the energy savings and longer life cycle may not be enough to recoup the higher initial cost.

They require a larger gas or electric hookup so retrofitting can be prohibitively expensive.

If you’re going to buy one:

Gas water heaters provide higher flow rates than those powered by electricity. They also use about 50% less energy than electric options.

If you’re buying gas, look for one with an intermittent ignition device (IID) since a standing pilot light wastes energy.

Look for a heater with a tiny tank or recirculation pump to avoid the “Cold Water Sandwich” effect.